Glossary of Terms

Logistics, Supply Chain & Warehousing Glossary

3PL

A common abbreviation: stands for Third Party Logistics. See Third Party Logistics.

Advanced shipment notification (ASN)

Advanced shipment notifications (ASNs) are used to give visibility of an order prior to arrival. Pertinent information for these include, but are not limited to: PO number, piece count, number of items, etc.

Allocations

Product which has been assigned to a given order in a WMS (warehouse management system)

Available

All inventory which is eligible to be shipped and is not damaged, on hold, or allocated

Backhaul

A term used in transportation to describe a truck picking up freight prior to returning to their hub.

Example: A truck delivers a load from New York to Atlanta. Prior to returning to New York, it picks up a load going to New Jersey to deliver on the way back

Backorder

A term used to describe an overallocation of an item.

Example: there are a total of 48 cases of item X in a warehouse, but an order calls for 57 cases of that item. 9 cases would be considered on backorder

Batch picking

A picking method whereby one SKU is picked one time for all applicable orders and then distributed across multiple orders in a staging or packing location.

Bill of Lading (BOL)

Legal documentation for any load of product travelling in a truck, whether it be LTL (less than truckload) or TL (truckload). This document includes pertinent data such as PO number, unit of measure and quantity, and weight

Bonded warehouse

A warehouse utilized for the storage of merchandise that is on hold until duty is paid.

Case/carton

Term for units of goods which are in corrugate packaging

Case picking

Method of picking where individual cartons are picked, to either be added to a pallet of product, or shipped small parcel (FedEx, UPS, USPS, etc.)

Chargeback

Monetary term used predominantly in cases of of vendor compliance issues, where product was not shipped correctly via the given guidelines for a consignee

Cold storage

Temperature controlled storage designed to keep the temperature of the warehouse consistent with products which need a lower temperature than ambient

Commodity

Term used to describe the type of product

Container

Term typically used to refer to ocean shipping containers. These come in two common sizes: 40 foot and 20 foot. Intermodal containers can also be 45 feet

Cross-dock

Product or orders that are brought into the warehouse but not put-away, rather held at the dock for a short period of time before being loaded out of the warehouse onto another truck

Cube

This term refers to shipment volume (Length X Width X Height), and most commonly means cubic foot or cubic meter

Cubed out

Term used to refer to a container of trailer being at maximum capacity (or very close to it)

Cycle count

Refers to the act of doing inventory for a set of items. These are physical verifications of what the system is showing to check accuracy

Cycle time

Cycle time is the amount of time it takes to get an order from order entry to shipping dock.

DC

Commonplace abbreviation for distribution center

Dead stock

Product that has been in inventory for an extended period of time without being moved or ordered

Dunnage

Packaging supplies used to ensure safety in transit. Can include paper, bubble wrap, air bags, etc.

EDI

Abbreviation for Electronic Data Interchange. Refers to the interactions between multiple computer systems to expedite and streamline communication of logistics feeds

FIFO

Abbreviation for “First in, first out”. If no other guidelines are given, standard protocol is to ship the oldest unit of a given item first to ensure that product does not sit for too long

FILO

Abbreviation for “First in, last out”

Floor load

Refers to product stacked directly onto the floor of a trailer without pallets or slip sheets; product must be unloaded manually without the use of a forklift

Food-grade warehouse

Denotes a warehouse that is certified to store food and edible ingredients. These certifications can come from a variety of sources, and are subject to auditing on no less than a yearly basis

Forecast

Estimated volumes for inbound and outbound activity

Forklift

Equipment used to move pallets of product in, out, and through a warehouse

FTZ (Free Trade Zone)

A special zoning designation wherein goods can be brought in, stored, reworked, and shipped out again without being subject to customs regulations. This can be an entire warehouse, or a portion of one

Full Truck Load (FTL)

Transportation terminology for a container or trailer that is deemed as filled, or cubed out

Handling charge

Charge for normal warehouse handling (inbound or outbound, or both) to customer

HazMat

Short for “hazardous material”

Honeycombing

The situation that occurs when a lot (see lot) is partially depleted and the remaining space is wasted because it cannot be utilized

In/Out Fee

Same as Handling Charge

Intermodal

Refers to multiple forms of transportation

For example: If a container is put on a train, and then picked up by a long haul truck to complete transit, it has used two modes of transport

Inventory

All stock for a customer (damaged, hold, allocated, or available)

Inventory Management

Tracking of inventory from inbound, storage, location moves or putaway, through to outbound shipping

Just-in-time (JIT)

An inventory system that aims to coordinate the arrival of materials or supplies at a facility at the moment that they are needed in an effort to reduce storage and holding costs

Kitting

Assembly of product or parts within the warehouse

Less-than-truckload (LTL)

Terminology used to refer to a shipment of pallet s that does not fill a trailer. Typically this refers to 10 pallets or less, though it is not a defined cut off

Load locks

Adjustable bars which are used to secure a load for transit

Locations

Refers to a specific section of a warehouse, used to quickly find product

Lot

A group or product with the same run or manufacturing date

Master Carton

Outer carton, often with markings from origin, that contains inner cartons for retailers

Pallet (Skid, Board)

Equipment designed for which to stack goods on in order to be easily transported, having easy access slots for forklifts. Can be made from wood, plastic, metal, or composite materials.

Pallet ID

The bar code tag that is placed on a pallet for tracking purposes

Pallet picking

Full pallet picking is also known as unit-load picking. A system or operation in which full pallet quantities are ordered and shipped.

Piece Picking

A picking operation where individual pieces are picked and shipped, as opposed to case or full pallet. Mail order catalog companies and repair parts distributors are good examples of piece pick operations.

Pinwheel

Pinwheeling is a process of arranging pallets on a truck or product on a pallet to make the best use of space when dealing with items of different sizes

Radio frequency identification

Commonly referred to as RFID, this refers to a method of paperless scanning of inventory

Seasonality

Refers to varying levels of inventory throughout the year (peaks and valleys)

Storage rate

Charge to client for all storage costs, usually on a month-to-month basis

SKU

Abbreviation for Stock Keeping Unit. This is a unique identifier for an item down to size, color, and style (if applicable)

Tare Weight

The weight of an empty shipping vessel (container, trailer, or packaging), Used to determine the actual weight of product only

Example: The gross weight of a container is 54,000 pounds, and the tare weight on the empty container is 8500 pounds. The weight of product only is 45,500 pounds

Third-party logistics

Commonly abbreviated to 3PL, this refers to companies who offer warehousing solutions and services for multiple customers. These services can include, but are not limited to: warehousing, trucking, VAS (value added services), labeling, cross-dock, transload, etc. These companies often require long-term contracts with customers to ensure security

Third-party warehouse

Warehouse operated by a 3PL company that houses the products of their clients

Unit of measure

Can be abbreviated to U/M. Refers to the measure of how an item will be shipped

Examples: Carton, case, unit, pallet, bag,sack

Warehouse management system (WMS)

Software programs designed for the specific task of tracking inventory and movement of product.